The R Roundup: IRS Spikes At NFTs — Issue #81
As regulators attempt to describe crypto, the uncomfortable tax conversation undoubtedly will be creeping up. As crypto is borderless, the innovations are endless, but how will NFTs play that part?
Collectibles in the US are taxable items, but how do you tax them if they are digital? Last week it was announced that there was an attempt to consider taxing NFTs on a par with collectibles like Stamps & Wine.
As the IRS tries to identify ways to clarify the treatment of digital assets, they are searching for people to comment and provide feedback on the proposal.
“(The IRS are) Soliciting feedback for upcoming guidance regarding the tax treatment of non-fungible token as a collectible under the tax law.” — IRS
Until then, the tax authority is set to treat NFTs like other underlying collectible assets.
Fraud Kwon Says NYC 🗽
Villains in this space often go unscathed. As the noise around the founder of Terraform Labs went silent, news of his arrest in Montenegro on Thursday, 23rd March, was all the noise needed.
Following his arrest, further reports broke that he was charged with Fraud in the US.
The 12-page indictment stated the following:
“Deceiving those individuals about aspects of the Terra blockchain, including its technology and the extent to which it had been adopted by users.”
As the Terra case is far from over, one thing can be assured, Kwon is no longer a free man.
Another “Sun” Bites The Dust☀️🚫
Continuing the US crypto crackdown, Justin Sun, founder of Tron, was also on the receiving end of regulatory charges.
The SEC sued Justin Sun on the grounds of securities and market manipulation charges. The SEC claimed that $TRX & $BTT are unregistered securities and alleged that Sun orchestrated an “extensive wash trading” program to amplify trading volumes.
“ This scheme required a significant supply of $TRX, which Sun allegedly provided. As alleged, Sun also sold $TRX into the secondary market, generating proceeds of $31 million from illegal unregistered offers and sales of the token” SEC.
As Gary Gensler always adds his two senses, he quoted that this is an example of the risks associated with crypto and unregistered securities.
Brian Armstrong Vs. Congress 🖲️🇺🇸
Issue #81 should have an error code stating Issue #REGULATORS. Coinbase completes the trifecta of regulatory pressure this week.
Coinbase Global announced that they received a Wells notice from the SEC claiming they are investigating their Earn product, wallet service, and exchange activity.
Coinbase has made it clear that they will continue operating products and services as usual despite the notice.
A Wells Notice is a regulatory document issued to entities under investigation.
Founder & CEO of Coinbase Brian Armstrong took to Twitter to express his frustrations toward the following notice.
Coinbase ended with:
“ We asked the SEC for reasonable crypto rules for Americans. We got legal threats instead.”
As a reminder, this is not a trading signal or investment advice; it is an opinion, and each trader/investor should know and understand the risks of trading cryptocurrencies. This should not be regarded as financial advice; feel free to familiarise yourself with our NFA disclaimer.
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